High Yield Hunting on Deadly Ground

Last August, I harvested a basket of high yielding stocks from what I called “stony ground.”

My point was falling interest rates had become a double-edged sword for income investors. On the one hand, returns for dividend paying stocks and fixed income securities were rising. And companies’ generation-low borrowing costs were firing up earnings as well.

The dark side was a much shallower pool of income generating investments offering a living yield unaccompanied by unacceptable risks. My high yield recommendations from the Portfolio were three communications companies from the Conservative Holdings and Algonquin Power & Utilities’ (TSX: AQN, NYSE: AQN) affiliate Atlantica Yield (NSDQ: AY).

Outside the Portfolio, I recommended a trio of energy midstream master limited partnerships from the Utility Report Card and French utility Engie SA (Paris: ENGI, OTC: ENGIY). I also reprised six recommendations from my “Fixed Income Picks” table, a portfolio of utility bonds that I updated more recently in the January 14 Utility Roundup “Hunting Bond Bargains in a Seller’s Market.”